Recipharm trades $140M for a Portuguese CDMO

Pharma outsourcer Recipharm has acquired a Portuguese contract drug developer for €112.3 million ($140 million) in cash and stock, bolstering its global scale and further consolidating the world of R&D service providers.

For its money, Recipharm gets the Lisbon-headquartered Lusomedicamenta Sociedade Técnica Farmacêutica, a contract development and manufacturing organization (CDMO) that grossed €50.7 million ($63.4 million) in revenue last year. Recipharm is putting up €67.1 million ($83.9 million) in cash, offering 3.5 million of its shares to make up the difference and promising €1.3 million ($1.6 million) more if Lusomedicamenta meets its 2014 revenue goals.

Recipharm, based in Stockholm, believes the acquisition will increase its sales by 20% a year, owing to the limited client overlap between the companies. Lusomedicamenta's principal focus is on the development and manufacture of solid, liquid and semi-solid dose forms.

Recipharm CEO Thomas Eldered

"The acquisition of Lusomedicamenta ... is perfectly in line with our strategic plan to access new markets, establish new customer relationships and consolidate the industry to become a major CDMO," Recipharm CEO Thomas Eldered said in a statement. "The new customer base combined with significant IP-backed sales in Portugal provides us with many new exciting opportunities."

Lusomedicamenta spells Recipharm's second acquisition since it went public earlier this year, following its $164.5 million August buyout of Italy's Corvette Pharmaceutical Services, a drug manufacturer with annual revenues around €57.7 million ($77 million).

The deal follows a wave of consolidation in the CDMO business, headlined by the $2.6 billion agreement that merged Patheon and DSM into the conglomerate DPx, which in September acquired biologics manufacturer Gallus BioPharmaceutials for an undisclosed sum. AMRI ($AMRI), another CDMO, spent more than $150 million on M&A this year to expand its capacity.

- read the announcement

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